Billions in Federal Contracts Go to U.S.-Controlled Companies Despite Carney’s Buy Canadian Push

By: Ebenezer Adugyamfi & Emmanuel Ayiku for GhanaianNewsCanada
5 October 2026

Prime Minister Mark Carney’s government has made buying Canadian products and services a central part of its economic strategy, particularly as Canada seeks to reduce its exposure to the United States amid continuing trade tensions.

But new analysis of federal procurement data shows that billions of dollars in government contracts have nevertheless gone to companies controlled by American corporations since Carney became prime minister.

According to a Toronto Star analysis of federal government data, approximately $7.8 billion in contracts awarded under Carney’s government have gone to American-controlled corporations, including companies operating through Canadian subsidiaries.

The findings have raised questions about how Canada defines a “Canadian” supplier and how quickly the federal government can reduce its reliance on American-controlled businesses in areas where Canadian alternatives may be limited.

The issue is particularly significant because Ottawa has repeatedly presented government procurement as a tool for strengthening Canadian industries, creating domestic jobs and building more resilient supply chains.

Carney’s “Buy Canadian” Commitment

Since becoming prime minister, Carney has repeatedly emphasized the need for Canada to become more economically self-reliant.

The federal government formally implemented its Buy Canadian Policy on December 16, 2025.

Under the policy, federal procurement is designed to give greater consideration to Canadian suppliers and Canadian content, including manufacturing, research and development and other economic activity carried out in Canada.

The policy initially applied to major strategic procurements valued at $25 million or more and was subsequently expanded to contracts worth $5 million and above.

The government has also committed to requiring Canadian-produced steel, aluminum and wood in major federal construction and defence projects.

Ottawa has described the strategy as part of a broader effort to make Canada its “own best customer” by using public spending to strengthen domestic industries.

In the 2025 federal budget, the government said the policy could direct as much as $70 billion in additional public investment toward Canadian-made products and services.

What the $7.8 Billion Figure Represents

The Toronto Star’s analysis requires some context.

The headline figure of $7.8 billion does not mean that Ottawa simply sent $7.8 billion to companies located in the United States.

A major complication is that federal procurement records generally identify the company receiving the contract but do not necessarily distinguish between a Canadian-owned company and a Canadian-incorporated subsidiary controlled by a foreign parent.

That means a company can operate in Canada, employ Canadian workers and perform work in Canada while ultimately being owned by a corporation headquartered in the United States.

The distinction matters because government procurement can have economic benefits inside Canada even when the parent corporation is foreign-owned.

For example, a U.S.-controlled company may have Canadian employees, Canadian facilities, Canadian suppliers and Canadian manufacturing operations.

As a result, ownership alone does not necessarily show where all the economic value created by a contract ultimately goes.

Most Federal Contract Spending Still Goes to Canadian-Based Suppliers

Federal procurement data also shows that the majority of government contracts continue to go to suppliers operating in Canada.

Public Services and Procurement Canada reported that in the 2024–25 fiscal year, it awarded $55.6 billion in contracts for goods, services and construction.

Approximately $50.9 billion, or 91 per cent, went to suppliers located in Canada.

That figure is important when assessing the Toronto Star findings.

The issue is therefore not simply that Ottawa is abandoning Canadian suppliers.

Rather, the debate concerns who owns some of the companies operating in Canada, how much Canadian content is contained in the products and services being purchased, and whether Canadian businesses have the capacity to replace foreign-controlled suppliers in strategic industries.

Those questions become particularly complicated in areas such as technology, defence, cloud computing and specialized engineering.

Defence Contracts Complicate the Picture

Defence procurement represents one of the areas where the distinction between Canadian operations and Canadian ownership is especially important.

Canada is undertaking major investments to rebuild and expand its military capabilities.

The federal government has said it wants to use defence spending to strengthen Canada’s industrial base and create domestic manufacturing capacity.

In July, Carney announced a major partnership with General Dynamics Land Systems-Canada to produce a new fleet of armoured combat vehicles for the Canadian Armed Forces.

General Dynamics is an American company, but its Canadian operation manufactures military equipment in London, Ontario and employs Canadian workers.

Carney described the arrangement as part of his government’s Defence Industrial Strategy and said the objective was to invest in Canadian workers, Canadian steel and Canadian manufacturing.

The government has adopted a “build, partner, buy” approach, meaning Ottawa intends to build domestically where Canada has the necessary capabilities while partnering with trusted allies when domestic capacity does not exist.

That approach illustrates one of the central challenges surrounding the Buy Canadian policy.

Canada cannot necessarily manufacture every product or provide every service required by the federal government entirely through Canadian-owned companies.

Technology Presents Another Challenge

Technology is another area where American companies maintain a significant presence in Canada’s economy.

Large U.S. technology companies provide cloud computing, software, cybersecurity and other digital services used by governments and businesses.

Replacing those services with Canadian-owned alternatives can take years and require substantial investment.

Some experts have therefore argued that Canada’s economic-security strategy should focus not only on the nationality of the company receiving a contract but also on where the technology, workers, infrastructure and intellectual property are located.

The debate is particularly relevant to government data.

Canada has been examining ways to develop greater domestic control over strategic digital infrastructure as concerns about dependence on foreign technology companies have increased.

Ottawa Says the Policy Is About More Than Ownership

The federal government’s procurement policy does not define “Canadian” simply by requiring every supplier to be Canadian-owned.

Instead, it places greater emphasis on Canadian content and economic activity.

Under the policy, Canadian businesses and Canadian content receive priority in major federal procurements.

The government says this includes activities such as domestic manufacturing, research and development and other economic contributions taking place in Canada.

This means a foreign-owned company with substantial Canadian operations can potentially benefit from federal procurement while still contributing to Canada’s domestic economy.

The policy also allows procurement from trusted trading partners when Canadian suppliers are not available.

That provision is intended to balance economic nationalism with practical considerations around supply, competition and national security.

Why American Companies Continue to Receive Contracts

There are several reasons U.S.-controlled companies can continue to receive federal contracts despite Ottawa’s Buy Canadian policy.

First, some of these companies already have large operations in Canada.

Second, certain industries have relatively few Canadian-owned companies capable of handling major federal contracts.

Third, defence and technology procurement can involve highly specialized equipment and expertise that may not be readily available from domestic suppliers.

Fourth, some contracts were awarded during periods when the government’s new Buy Canadian rules were not yet fully in effect.

The government announced the policy in 2025, but its implementation occurred in stages.

Consequently, measuring the policy’s effectiveness simply by examining every contract awarded since Carney became prime minister may not provide a complete picture of how the policy itself has changed procurement patterns.

The $7.8 Billion Figure Raises a Broader Question

The latest figures nevertheless raise an important question for Ottawa: How Canadian does a federal contract need to be to qualify as “Buy Canadian”?

There are several possible ways of answering that question.

One approach is ownership.

Under that definition, the government would prioritize companies whose ultimate parent is Canadian.

Another approach is economic activity.

Under that model, a foreign-owned company with substantial Canadian manufacturing, employment, research and supply chains could still qualify as an important contributor to the Canadian economy.

A third approach could combine both.

Ottawa could prioritize Canadian-owned companies while also requiring foreign-owned companies receiving major contracts to demonstrate significant Canadian investment, employment, manufacturing and research commitments.

The federal government has already moved in that direction in some major defence procurements.

Government Procurement as an Economic Tool

Federal procurement represents a significant amount of economic activity.

The government purchased approximately $66.9 billion worth of goods, services and construction in the 2024–25 fiscal year, including $55.6 billion awarded through Public Services and Procurement Canada.

That spending gives Ottawa considerable influence over Canadian industries.

By directing more procurement toward domestic suppliers, the government can potentially create demand that allows Canadian companies to expand their operations, hire more workers and invest in new technologies.

But procurement rules also have to balance several competing considerations, including cost, competition, security, technical capability and the availability of suppliers.

A policy that excludes foreign companies completely could potentially reduce competition or make some government purchases more expensive if suitable Canadian alternatives do not exist.

The Government’s Broader Economic Strategy

The Buy Canadian policy forms part of a much larger economic strategy being pursued by Carney’s government.

Ottawa has also been promoting infrastructure projects, domestic energy development, defence manufacturing and new international trade relationships.

In August, Carney announced a major shipbuilding contract in Quebec and emphasized the government’s objective of building more of Canada’s strategic infrastructure domestically.

The prime minister said Canada needed to strengthen domestic production while diversifying its international trade relationships.

The strategy reflects Canada’s response to an increasingly uncertain relationship with the United States.

For decades, Canadian businesses have depended heavily on the American market and American-owned companies have played an important role in Canada’s economy.

The current government is attempting to reduce some of those dependencies while maintaining access to the U.S. market.

A Complicated Measure of Economic Independence

The Toronto Star analysis illustrates how difficult it can be to measure progress toward economic independence.

A contract awarded to a U.S.-owned company operating in Canada can simultaneously represent Canadian jobs and Canadian economic activity while also sending profits and corporate control ultimately to a foreign parent.

Similarly, a Canadian-owned company may purchase American components or technology as part of fulfilling a federal contract.

The economic reality is therefore more complicated than simply dividing government suppliers into “Canadian” and “American.”

The more detailed questions involve ownership, jobs, manufacturing, supply chains, intellectual property, taxation, research and development and where the economic benefits ultimately remain.

What Happens Next

The federal government is likely to face continued scrutiny over how effectively its Buy Canadian policy changes the composition of government procurement.

The $7.8 billion figure will likely fuel questions from opposition parties and critics about whether Ottawa’s procurement commitments are being implemented quickly enough.

At the same time, the government can point to the fact that the majority of federal procurement continues to go to suppliers operating in Canada and that the new procurement framework only became fully operational in stages.

The more meaningful test may therefore be whether the proportion of Canadian content, domestic manufacturing, Canadian employment and Canadian-owned suppliers increases over time.

For Canadians, the debate goes beyond a single figure.

It raises a fundamental economic question: Can Canada use its enormous public purchasing power to build stronger domestic industries while still obtaining the technology, equipment and expertise it needs?

The answer will depend not only on where federal contracts are awarded, but also on whether Canada can develop the domestic companies and industrial capacity needed to compete for those contracts in the first place.